aUSD may be minted and redeemed from the system for $1, allowing arbitragers to balance the supply and demand for aUSD on the open market. A user must always deposit $1 worth of value into the system in order to mint fresh aUSD.
If the market price is higher than the price objective of $1
There is an arbitrage opportunity to mint tokens by placing $1 of value into the system per aUSD and sell the minted aUSD for above $1 in the open market.
If the market price is lower than the price objective of $1
There is an arbitrage opportunity to redeem aUSD tokens by purchasing cheaply on the open market and redeeming aUSD for $1 of value from the system.
When the aUSD is at the 100% collateral phase, all of the value utilized to mint the aUSD is collateral.
At all times, a user can redeem aUSD for $1 worth of system value. The distinction is just the percentage of collateral and ATM refunded to the redeemer. When aUSD is in the 100% collateral phase, the value received after redeeming aUSD is 100% collateral. As the protocol enters the fractional phase, a portion of the value that exits the system after redemption becomes ATM.